Transfer of undertakings: procedural aspects

On August 25, 2011, in Transfer of undertakings, by Kalina Jaroslawska

Employers participating in the transfer of undertakings must meet certain procedural requirements to make sure the the transfer complies with the labour legislation and measures for protection of employees.

First, they must notify their trade unions or – where there are no trade unions present – their employees of the transfer and related matters (such as reasons for the transfer and its predicted effects as well as plans concerning employment or work and pay conditions). Notification must be made in writing at least 30 days before the planned date of the transfer. However, failure to provide notification does not render the transfer null and void.

Second, the employer may not terminate the employee solely on the grounds of the transfer. Such termination will be considered unjustified and trigger employee remedies I discussed in some of the blog entries before. However, there may be other reasons to justify termination, e.g. the need to restructure or reduce the employer’s workforce, or an employee’s poor performance. The important thing is that any such reason must be genuine and concrete.

Third, employers partaking in the transfer of undertakings must bear in mind that in connection with the transfer an employee is entitled to make use of a “summary” termination procedure, that is, an employee may terminate the employment contract on 7 days’ notice within 2 months of transfer, without giving reasons. An employment contract so terminated will be understood to have been terminated by the employer with the applicable period of notice. Since the procedure of transfer is aimed at protecting the employee in the first place, there is no equivalent right for the employer and no “summary” termination procedure is available for them. As mentioned above, even regular dismissals solely on the grounds of the transfer are limited.

Photo: http://www.flickr.com/photos/cristinabe/4635930677/

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Transfer of undertakings: the concept of transfer

On August 11, 2011, in Transfer of undertakings, by Kalina Jaroslawska

sxc.hu

Polish labour law does not give a definition of the transfer of undertakings. However, it is traditionally understood as any organizational change which leads to transfer of ownership and includes mergers, takeovers or divisions of undertakings. Legal titles for such transfers are various: sale, lease, inheritance or other.

In the recent years, mostly under the influence of the Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees’ rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses, and the related EJC rulings, the understanding of the transfer of undertakings has changed, or rather – broadened to include a number of further sets of circumstances. In short, the transfer of undertakings may be considered to occur:

  • on takeover of tasks, not necessarily assets;
  • on subcontracting certain tasks to a third party contractor (in bilateral relationships);
  • on takeover of services, previously outsourced to one party, by another service provider, especially if such takeover of services was accompanied by takeover of assets related to these services (in tripartite relationships).

Obviously, not all situations described above will automatically trigger the transfer of undertakings. There are certain additional aspects which must be taken into consideration, such as:

  • the kind of day-to-day activity of the parties involved;
  • whether the takeover of tasks/services was accompanied by takeover of assets;
  • whether the tasks/services taken over constitute the major or auxiliary part of the business of the party who launched the takeover.

Because of this it is becoming increasingly difficult to state conclusively whether business transactions are caught by the transfer of undertakings. Needless to say, this leads to a lot of legal uncertainty, both on the part of the employee and the employer. Depending on particular circumstances, the party to whom tasks or services have been subcontracted may not even be aware that the transfer of undertakings has taken place, not mentioning the related employees. From this perspective, even though the broadening concept of the transfer of undertakings was originally and is still meant to protect the employees, it may oftentimes backfire rather than help.

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What is the rule of equal treatment?

On August 2, 2011, in Discrimination, by Kalina Jaroslawska

sxc.hu

Polish labour legislation provides for the obligation to treat all employees equally with respect to conclusion and termination of employment, employment conditions, promotion and access to professional training, irrespective of:

  • sex;
  • age;
  • disability;
  • race;
  • religion;
  • nationality;
  • political views;
  • trade union membership;
  • ethnic background;
  • religious creed;
  • sexual orientation;
  • full-time or part-time employment;
  • employment for indefinite or fixed time.

In short, this is a general anti-discrimination clause, which is as a result of adjusting Polish labour legislation to the EU standards before the EU accession in 2004.

If the employer differentiates situations of particular employees based on one or several reasons listed above, then they will be considered to violate the anti-discrimination clause, unless they are in a position to demonstrate that such differentiation is justified by genuine occupation requirements. Examples of such genuine occupation requirements would include:

  • experience and length of employment affecting the conditions of employment, salary or promotion;
  • grounds related to parenthood protection or disability reasons;
  • changes in working time arrangements if justified by reasons unrelated to employees.

Remedies available to discriminated employees are not overwhelming: they may claim damages no lower than minimal wages (there is no upper limit) and they are guaranteed protection from dismissal once the claim has been brought. The claim may also be made after the employment relationship has come to an end, no matter whose initiative that was. Damages must be effective, proportionate and preventive.

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